Saturday, December 17, 2011

Safaricom now raises the bar for Bonga points reward

Mobile service provider Safaricom has doubled the number of Bonga points its customers require to redeem handsets.

Safaricom has attributed the rewarding changes in its customer loyalty programme to currency volatility hence the need to cut on costs.

Under the new matrix, a subscriber will, for example, require 50,000 Bonga points to redeem a Samsung Galaxy Mini phone up from 25,000 points.

One Bonga point is earned for every Sh10 spent on voice calls, SMSs and data.

“We have had to change the matrix because of the high prices at which we bought the handsets,” Safaricom Corporate Affairs manager Nzioka Waita told the Sunday Nation.

He, however, noted that Bonga points required to redeem other rewards such as data, SMSs and airtime remain unaffected.

Launched in January 23, 2007, the loyalty programme is as way of rewarding customers for use of Safaricom services.

Loyalty programmes are popular in retail and airline business where they are also used as a strategy for customer retention.

Profits drop

In November, Safaricom reported a 47 per cent drop in profit after tax for the first six months in 2011/12 financial year at it earned Sh4 billion down from Sh7.63 billion recorded over a similar period in 2010.

Safaricom revenue grew by 5.3 per cent while cost went up by average of 20.6 per cent.

This was the first drip in profitability since it commenced business in Kenya 11 years ago and was largely attributed to rising costs comparative to revenues.

The largest mobile operator had in September announced a 33 per cent increase on voice tariffs per minute, citing a weak shilling and escalating price of inputs which raised the company’s operational costs to unsustainable levels.

Addressing the media then, Safaricom CEO Bob Collymore explained that the need to review the prices were brought about by economic turbulence adding that the company needed to maintain a healthy balance between shareholders’ concern for profitability and consumer need for affordable services.

“We are heavily reliant on regular importation of US dollar-denominated capital equipment and energy sources such as the national electricity grid and diesel fuel to power our extensive telecommunications network,” he said.

Companies have recently introduced measures to reduce the high costs of doing businesses in Kenya in the past few months.